NPD: collaborate or lose out

Food manufacturers that fail to embrace the principles of 'open innovation' by collaborating with external partners will be left behind in the new product development (NPD) stakes, Unilever has warned.

Speaking at a conference in Amsterdam hosted by the European Networking Group, Unilever collaborative innovation director Dr Graham Cross said it was becoming increasingly clear from data highlighting the source of patent applications and successful product launches that the in-house research and development (R&D) or NPD departments of large companies were no longer driving innovation.

He added: "If you are stuck in the cocoon of a big company, you're missing half the action."

Consultant McKinsey & Co recently revealed that the top seven companies accounted for just 5% of all patents filed for laundry and home-care products between 2000 and 2005, said Cross. "Inter-company constellations are creating innovation and value." In practice, this meant companies had to open their doors to ideas from external sources, from consumers to entrepreneurs, packaging, raw materials and equipment suppliers and academics, he said.

Thanks to networks such as NineSigma, companies could tap into completely new sources of ideas and technologies in record time, developing mutually beneficial collaborations in order to ensure that the best ideas got to market through pooling talents and resources. He added: "We have to get collaboration into our DNA."

This meant building an infrastructure to enable outsiders to engage with businesses, he said. "You must have the ability to integrate external capability into your innovation process."

Collaboration did not, however, mean the theft of intellectual property, he stressed. "It's not about setting suppliers a brief and then copying it. It's about bringing them in from the start to define and develop the brief and then setting up win-win agreements."

His comments came as General Mills announced the launch of its own open innovation initiative: the Worldwide Innovation Network.The firm's director of external innovation, Jeff Bellairs, said that large companies often claimed to be open to new ideas and new technologies, but did not have a formalised mechanism for handling them, which raised concerns about intellectual property and meant opportunities were missed.

He added: "Through our web portal (www.generalmills.com/win), there is an official way to start a dialogue, whether it's with scientists, entrepreneurs, inventors, chefs or consumers."